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	<title>Comments on: The Nirvana Fallacy is Not the &#8220;Fiction&#8221; Fallacy</title>
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	<link>http://truthonthemarket.com/2012/08/28/the-nirvana-fallacy-is-not-the-fiction-fallacy/</link>
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		<title>By: TJ</title>
		<link>http://truthonthemarket.com/2012/08/28/the-nirvana-fallacy-is-not-the-fiction-fallacy/#comment-50129</link>
		<dc:creator><![CDATA[TJ]]></dc:creator>
		<pubDate>Thu, 30 Aug 2012 02:00:05 +0000</pubDate>
		<guid isPermaLink="false">http://truthonthemarket.com/?p=13824#comment-50129</guid>
		<description><![CDATA[Adam, two quick points:

First, I contest that &quot;I could not answer&quot; your question. In fact, I thought I answered it. Here is what I said:

&quot;In one sense you could say that anybody (including me) making the comparison between patents and real property is committing a Nirvana fallacy, because they are implicitly comparing (a) the actual patent system of today, and (b) a hypothetical nonexistent patent system that in their idealized imagination operates like the real property system. I would agree that is a Nirvana fallacy. But the implication of that logic would be to stop making comparisons between patents and real property altogether, at any level of abstraction. That, to my understanding, is not your argument.&quot;

Second, lets take Demsetz’s example of the nirvana fallacy when an economist implicitly posits that regulation always works perfectly to fix market failures. I agree that is a Nirvana fallacy, because I disagree that anybody has a &quot;loose intuition&quot; this is true as an empirical matter. Please name a single person who would defend the proposition, as an empirical assertion about the real world, that regulation always works perfectly to fix market failures. Nobody does (at least I have a loose intuition that nobody does). There is an important difference between a loose and objectively provable or falsifiable intuition about the real world and an idealized fiction, which I think you are missing.]]></description>
		<content:encoded><![CDATA[<p>Adam, two quick points:</p>
<p>First, I contest that &#8220;I could not answer&#8221; your question. In fact, I thought I answered it. Here is what I said:</p>
<p>&#8220;In one sense you could say that anybody (including me) making the comparison between patents and real property is committing a Nirvana fallacy, because they are implicitly comparing (a) the actual patent system of today, and (b) a hypothetical nonexistent patent system that in their idealized imagination operates like the real property system. I would agree that is a Nirvana fallacy. But the implication of that logic would be to stop making comparisons between patents and real property altogether, at any level of abstraction. That, to my understanding, is not your argument.&#8221;</p>
<p>Second, lets take Demsetz’s example of the nirvana fallacy when an economist implicitly posits that regulation always works perfectly to fix market failures. I agree that is a Nirvana fallacy, because I disagree that anybody has a &#8220;loose intuition&#8221; this is true as an empirical matter. Please name a single person who would defend the proposition, as an empirical assertion about the real world, that regulation always works perfectly to fix market failures. Nobody does (at least I have a loose intuition that nobody does). There is an important difference between a loose and objectively provable or falsifiable intuition about the real world and an idealized fiction, which I think you are missing.</p>
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		<title>By: Bruce Boyden</title>
		<link>http://truthonthemarket.com/2012/08/28/the-nirvana-fallacy-is-not-the-fiction-fallacy/#comment-50081</link>
		<dc:creator><![CDATA[Bruce Boyden]]></dc:creator>
		<pubDate>Wed, 29 Aug 2012 15:42:27 +0000</pubDate>
		<guid isPermaLink="false">http://truthonthemarket.com/?p=13824#comment-50081</guid>
		<description><![CDATA[Great paper Adam. I entirely agree it&#039;s important to be clear what exactly is being placed on both sides of the analogy. I&#039;d like to take one facet of your response to T.J. above in a slightly different direction, however:

&quot;Similarly, what patent scholars like T.J. are doing is saying: &#039;I can’t believe that trespass isn’t clear and efficient, because I don’t know anyone who has been involved in a trespass lawsuit or I don’t hear of any serious trespass lawsuits.&#039;&quot; I agree you can&#039;t infer trespass doctrine&#039;s *clarity* from anecdotal impressions of the frequency of lawsuits. But it might still be efficient, in the sense of using a near-enough-to-optimal amount of judicial and party resources to resolve the number of disputes that do arise. Along those lines, I think a better response to your paper might be that it&#039;s not *as important* for property law to be clear about the more ethereal aspects of property ownership such as easements, restrictive covenants, future interests, or adverse possession because those issues hardly ever come up in ordinary life -- typically only around sales, which are infrequent events. The practical effect of property law in the experience of most people is to give legal effect to visible markers of ownership, such as lawns, fences, houses, fields, etc. -- in other words, to help define what is and is not infringing on the right to exclude from physical boundaries -- and it performs that background task adequately well. The legal specification of the physical boundaries of a piece property, and the designation of current ownership of property, tend to correspond well enough with the visible markers, so that ordinary individuals are able to tell without hiring lawyers or engaging in litigation where they can walk, where they can erect signs, where they can plant crops, etc. Patents lack visible markers, however, and the claim language in a patent (so goes the argument) is not an analogous substitute, such that the basic ordinary task of a patent for your average business of setting out what they can and can&#039;t do without hiring a lawyer or engaging in litigation is not achieved.

This argument is of course based on intuitions on how frequently these issues arise for your average person, and perhaps my intuitions about how frequently basic questions of property ownership arise are off, or perhaps easements, future interests etc. are much more frequently an issue for average people than I am familiar with. MERS might be an example where interests in real property not only do not correspond with visible markers, but are also very difficult to determine from public records, so difficult in fact that the interest-holders have a hard time proving the validity of their interests -- but MERS itself, of course, has been accused of being dysfunctional. Or perhaps, despite all the news coverage, your average company in an innovating market does not need to worry about patent infringement all that often, about as often as real property holders need to worry about easements. (Lots of companies *do* worry about patents, of course, but then people worry about shark attacks too, so that doesn&#039;t by itself tell us how frequently the event occurs.)]]></description>
		<content:encoded><![CDATA[<p>Great paper Adam. I entirely agree it&#8217;s important to be clear what exactly is being placed on both sides of the analogy. I&#8217;d like to take one facet of your response to T.J. above in a slightly different direction, however:</p>
<p>&#8220;Similarly, what patent scholars like T.J. are doing is saying: &#8216;I can’t believe that trespass isn’t clear and efficient, because I don’t know anyone who has been involved in a trespass lawsuit or I don’t hear of any serious trespass lawsuits.&#8217;&#8221; I agree you can&#8217;t infer trespass doctrine&#8217;s *clarity* from anecdotal impressions of the frequency of lawsuits. But it might still be efficient, in the sense of using a near-enough-to-optimal amount of judicial and party resources to resolve the number of disputes that do arise. Along those lines, I think a better response to your paper might be that it&#8217;s not *as important* for property law to be clear about the more ethereal aspects of property ownership such as easements, restrictive covenants, future interests, or adverse possession because those issues hardly ever come up in ordinary life &#8212; typically only around sales, which are infrequent events. The practical effect of property law in the experience of most people is to give legal effect to visible markers of ownership, such as lawns, fences, houses, fields, etc. &#8212; in other words, to help define what is and is not infringing on the right to exclude from physical boundaries &#8212; and it performs that background task adequately well. The legal specification of the physical boundaries of a piece property, and the designation of current ownership of property, tend to correspond well enough with the visible markers, so that ordinary individuals are able to tell without hiring lawyers or engaging in litigation where they can walk, where they can erect signs, where they can plant crops, etc. Patents lack visible markers, however, and the claim language in a patent (so goes the argument) is not an analogous substitute, such that the basic ordinary task of a patent for your average business of setting out what they can and can&#8217;t do without hiring a lawyer or engaging in litigation is not achieved.</p>
<p>This argument is of course based on intuitions on how frequently these issues arise for your average person, and perhaps my intuitions about how frequently basic questions of property ownership arise are off, or perhaps easements, future interests etc. are much more frequently an issue for average people than I am familiar with. MERS might be an example where interests in real property not only do not correspond with visible markers, but are also very difficult to determine from public records, so difficult in fact that the interest-holders have a hard time proving the validity of their interests &#8212; but MERS itself, of course, has been accused of being dysfunctional. Or perhaps, despite all the news coverage, your average company in an innovating market does not need to worry about patent infringement all that often, about as often as real property holders need to worry about easements. (Lots of companies *do* worry about patents, of course, but then people worry about shark attacks too, so that doesn&#8217;t by itself tell us how frequently the event occurs.)</p>
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		<title>By: Laura Bennett Peterson</title>
		<link>http://truthonthemarket.com/2012/08/28/the-nirvana-fallacy-is-not-the-fiction-fallacy/#comment-50020</link>
		<dc:creator><![CDATA[Laura Bennett Peterson]]></dc:creator>
		<pubDate>Wed, 29 Aug 2012 05:30:31 +0000</pubDate>
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		<description><![CDATA[Isn&#039;t perfect competition the paradigmatic Nirvana fallacy at least as an idealized counterfactual standard?  (I&#039;d have to reread Demsetz to see just how he defined it.)]]></description>
		<content:encoded><![CDATA[<p>Isn&#8217;t perfect competition the paradigmatic Nirvana fallacy at least as an idealized counterfactual standard?  (I&#8217;d have to reread Demsetz to see just how he defined it.)</p>
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